U.S. geothermal energy sector promising
Thu Sep 6, 2007
Market News
To help extend usage of geothermal beyond the Western states with an abundance of heat sources like geysers, he said the department's focus is moving beyond conventional geothermal -- finding a hot spot on which to build a facility -- into enhanced geothermal systems, or engineering geothermal reservoirs.
"That's where we think the future really lies. All of the earth underneath the United States has some thermal capacity," he said. "The question is how to access that heat and get it to generate turbines."
POLICY IS MAJOR HURDLE
The fortunes of geothermal usage are also closely tied to the actions of Congress on the tax credits, he said. Congress will likely extend them when they expire at the end of 2008 but what is more important is to provide a predictable policy environment by approving longer extensions, Karsner added.
Up to now the credits have been "renewed in such a way that everybody is holding their breath every 24 months ... it is very difficult to induce the domestic industry with a long-term plan when you have an erratic short-term tax policy driving it ... Policy is the major restraint," Karsner said.
"If you assume that they do get a constant production tax credit, you can easily imagine doubling, tripling or quadrupling of this industry within a decade," he added.
Other barriers, he said, include lack of sufficient trained manpower and a dearth of sufficient domestic geothermal equipment production capacity. Cost was a factor as projects are typically capital-intensive in early stages, he added.
But once a resource is tapped, "the fuel is free, clean, domestic, secure and base-load (available year round)."
U.S. geothermal energy sector promising
Thu Sep 6, 2007
Market News
To help extend usage of geothermal beyond the Western states with an abundance of heat sources like geysers, he said the department's focus is moving beyond conventional geothermal -- finding a hot spot on which to build a facility -- into enhanced geothermal systems, or engineering geothermal reservoirs.
"That's where we think the future really lies. All of the earth underneath the United States has some thermal capacity," he said. "The question is how to access that heat and get it to generate turbines."
POLICY IS MAJOR HURDLE
The fortunes of geothermal usage are also closely tied to the actions of Congress on the tax credits, he said. Congress will likely extend them when they expire at the end of 2008 but what is more important is to provide a predictable policy environment by approving longer extensions, Karsner added.
Up to now the credits have been "renewed in such a way that everybody is holding their breath every 24 months ... it is very difficult to induce the domestic industry with a long-term plan when you have an erratic short-term tax policy driving it ... Policy is the major restraint," Karsner said.
"If you assume that they do get a constant production tax credit, you can easily imagine doubling, tripling or quadrupling of this industry within a decade," he added.
Other barriers, he said, include lack of sufficient trained manpower and a dearth of sufficient domestic geothermal equipment production capacity. Cost was a factor as projects are typically capital-intensive in early stages, he added.
But once a resource is tapped, "the fuel is free, clean, domestic, secure and base-load (available year round)."